CHANNEL

1. Channels using marketing intermediaries

1.1. -producer to wholesaler to retailer to consumer -producer to wholesaler to business user -producer to agent to wholesaler to retailer to consumer -producer to agent to wholesaler to business user -producer to agent to business user

2. Contractual System -coordinates channel activities through formal agreements among channel members

2.1. Retail Cooperative -retailers establish a shared wholesaling operation

2.2. Franchise -a franchisee agrees to meet the operating requirements of a manufacturer

2.3. Effective logistics requires -proper supply chain management -control of the activities of purchasing, processing and delivery

2.4. Supply chain -begins with raw materials inputs for production -ends with the movement of final product to customers -

3. Major Transportation Modes

3.1. Railroads -most efficient ways for moving bulky commodities over long distances

3.2. Motor carries -relatively fast and consistent service -receives greater revenue per ton shipped -

3.3. Water carriers -include inland or barge lines -freight rates are based on the size of the vessel, cost of fuel and security measures

3.4. Pipelines -efficiently transports natural gas and oil

3.4.1. Advantages -low maintenance -dependable

3.4.2. Disadvantages -few location -relatively slow

3.5. Air freight -Declining in certain market sectors -firms are adapting

4. Inventory Control system -Just in time (JIT) -RFID techonolgy -Vendor managed inventory (VMI)

5. Radio Frequency Identification (RFID) -techonology that use a tiny ship with identification information that can be read by a scanner using radio waves from a distance -use to grant access to restricted areas

6. Logistic Cost Control -distribution function accounts for half of a firm total marketing costs -reexamining each link of their suply chains to identify activities

7. Customer-service standards -state the goals and define acceptable performance for the quality of services -after these standards are defined, desingners assemble other physical distribution components to meet these standards at the lowest possible costs

8. Factors influencing Marketing Channel Startegies

8.1. Markets Factors

8.1.1. Short Channels -business users -geographically concentrated -large orders

8.1.2. Long channel -Consumers -geographically dispersed -small orders

8.2. Products Factors

8.2.1. Short channel -perishable -complex -expensive

8.2.2. Long Channles -durable -standardized -inexpensive

8.3. Organizational Factors

8.3.1. Short channel -broad product line -channel control important

8.3.2. Long channel -limited product line channel control not important

8.4. Competitive factors

8.4.1. Short Channel -manufacturer feels satisfied with marketing intermediaries performance in promoting product -

8.4.2. Long channel -manufacturer feels dissatisfied with marketing intermediaries performance in promoting product

9. Legal problems of exclusive distribution

9.1. Exclusive dealing agreement -prohibits a marketing intermediary from handling competing products

9.2. Closed sales territories -restrict their distributors to certain geographic regions

9.3. Typing agreements -allow channel members to become exclusive dealers if they carry product other than those that they want to sell

10. Funtion of marketing channels -facilitating the exchange process -adjusting for discrepancies in the market assortment -standardizing exchange transaction facilitates searchers by both sellers and buyers

11. Types of Marketing Channels

11.1. Marketing intermediary -organization that operates between producers and consumers

11.2. Resellers -whosalers -retailers -agents -facilitators

11.3. Service firm through short channels because they sell intangible products and need to maintain personal relationships within their channels

12. Determining Distribution Intensity

12.1. Intensive distribution -distribution product through all available channel

12.2. Selective distribution -distribution product thrpugh a limited number of channels

12.3. Exclusive distribution -distribution product through a single wholesaler or retailer in specific geographic region

13. Direct Selling

13.1. Direct channel -carries good directly from a producer to the business purchaser

13.2. Direct Selling -direct sales between producer and final user -important option for goods that require extensive demostrations in persuading customers to buy

14. Warehousing

14.1. Storage warehouse -holds goods for moderate to long period to balance supply and demand

14.2. Distribution warehouse -assembles and redistributes goods, keeping them moving

14.3. automated warehouse technology -can cut distribution costs and improve customer service

14.4. Warehouse location -main influences on choice -

15. Physical Distribution -customer service -transportation -Inventory control -order processing -warehousing

16. Classes if carries

16.1. Common carriers -provide transportation services as hire carriers to public

16.2. Contract carries -for hire transporters that do not offer their services to public

16.3. Private carriers -provide transportation services solely for internally generated freight

17. Channel Mangement and leadership

17.1. Channel captain -dominant and controlling member of a marketing channel

18. Channel Conflict

18.1. Horizontal conflict -disagreement among channel members at the same level

18.2. Vertical conflict -occurs among members at different levels of the channel

18.3. The gray market -goods produced for overseas markets

19. Vertical Marketing system

19.1. -designed to improve distribution efficiency and cost-effectiveness

19.2. Benefits -improve chances for controlling and coordinating the steps in the distribution or production process leading to greater efficiency of channels -lead to develop economic of scale -let a manufactur expand into profitable new business

19.3. Disadvantage -involves some costs -marketers lose some flexibility